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Topic: Thoughts on Minimum Wage? (Read 23025 times)

In the US there is no scaled minimum wage with age. Does it work well in AU? I wonder if employers could use it to exploit younger workers (fire them when they age out of the minimum wage and replace with other young workers)?

I am sure this does happen, but the jobs I had as a teenager were generally after school retail or fast food jobs. The younger people did get preference for these shifts as they were cheaper. And my first office job was specifically advertised as "office junior", once i had been there for a few years I was getting paid more but also had more experience.

None of my friends ever complained about loosing shifts or jobs when they became too old, but this is obviously only my experience so other people may have different stories. But I kinda felt that by the time you were old enough to be paid full wage you had often moved on from the job or had more availability as you weren't at school so more shifts opened up to you

In the US there is no scaled minimum wage with age. Does it work well in AU? I wonder if employers could use it to exploit younger workers (fire them when they age out of the minimum wage and replace with other young workers)?

Yes, that does happen. However, the sorts of jobs available to unskilled youths - McDs, shelf-stacker at a supermarket, etc - are ones they tend to do only as part-time while at school or early university years. A few go on to be managers, but the majority don't actually want to still be there at 25 years old.

The old-style lower wage jobs in factories, mines and on farms, etc, which some people might want to do for years or decades - they just don't exist as much. It's just the retail and hospitality parts of the service sector.

In practice those getting youth wages view it as a sort of "rite of passage" thing. You do it while studying so you can get a "real" job. So while they do get fired for younger ones, usually they don't need to be, since they just leave. And even without that, there's a huge turnover of staff, since 15-18 year olds tend not to be super-motivated and passionate about anything, let alone stacking a shelf.

Policymakers love to suggest that unconditional cash transfers, particularly those targeted to families with children will cause an increase in fertility as families try to gain eligibility for benefits. This is not true. The Transfer Project has found no evidence of increases in fertility—in fact in two countries (Kenya and South Africa), it was found that cash transfers actually decreased early pregnancy among young women and adolescent girls. Let us not assume that giving support to poor households will result in the next baby boom.

Even in the US, people with higher incomes tend to have fewer children.

That sounds like an apples-to-oranges comparison, though. Different cultures, different levels of diversity, correlation vs causation, etc.

To those that say "the fight for $15" will result in less workers, it's not true.

Here we have 4 new workers starting their careers, made possible by rising wages for low skill workers:

Happy, hard working employees who never need a break, always show up on time, never take a day off, and never take to the streets demanding ridiculous wages.

Enjoy that $15/hour wage...

What country is this from? Silly Americans with their center of the universe syndrome. This could be from Canada, Germany, Australia, Japan, Korea or anywhere. Your minimum wage laws have very little effect on automation...if it doesn't start in the USA it'll be imported from Canada where we already have these stations.

So what if the wage is $15 or $5 in the USA, in other countries we'll develop the automation and the jobs to support, build and code the machines, then we'll sell them into the American market. Keep your low minimum wage, its better for Canada if you do :) You can have the low tech and we'll do the high tech jobs, either way these machines are replacing your workers.

Obviously I'm exaggerating some about the high tech jobs leaving the USA, I'm trying to highlight that this is happening outside of the USA and your local wages have no bearing on it.

I agree that the automation is inevitable, but that doesn't mean that wages don't have some effect on how quickly it takes place. It might make sense for McDonalds to put in self ordering kiosks even at today's wages, but it probably isn't cost effective for Mom and Pop's Burger Joint. However, there is some level of minimum wage, could be $15/hour could be more or less, where even a small independent shop is going to find a way to reduce their labor force.

What country is this from? Silly Americans with their center of the universe syndrome. This could be from Canada, Germany, Australia, Japan, Korea or anywhere.

Well, it's probably not from Germany, Japan or Korea... since they don't tend to use English.

If we look at the machines we can see the Interac logo - this is a Canadian only thing. So my guess is it's from Canada.[/quote]Good eye, I was just randomly saying countries to illustrate a point; that automation isn't related to the minimum wage in the USA.

What country is this from? Silly Americans with their center of the universe syndrome. This could be from Canada, Germany, Australia, Japan, Korea or anywhere. Your minimum wage laws have very little effect on automation...if it doesn't start in the USA it'll be imported from Canada where we already have these stations.

So what if the wage is $15 or $5 in the USA, in other countries we'll develop the automation and the jobs to support, build and code the machines, then we'll sell them into the American market. Keep your low minimum wage, its better for Canada if you do :) You can have the low tech and we'll do the high tech jobs, either way these machines are replacing your workers.

Obviously I'm exaggerating some about the high tech jobs leaving the USA, I'm trying to highlight that this is happening outside of the USA and your local wages have no bearing on it.

That raises an interesting question. Will the minimum wage driving labor prices up or the massive focus on STEM jobs in the US driving automation costs down result in more job losses? They'll obviously work together nicely to find a price in the middle of where the costs are now. I'd guess the STEM focus, since it would take a lot of wage growth to make automating many jobs attractive now. Once automation costs start dropping, they'll probably only start dropping faster. You can buy a Raspberry Pi for $20 today that in every way beats the pants off a computer from 30 years ago that cost $3000 in 80s money. With ever more people working on it, think we'll see a similar curve for automation?

And as Prairie Stash points out, those darned Canadians will do it to us if we don't do it ourselves.

McDonalds is rolling these out in 2500 stores, but don't worry it won't replace those jobs they say!

How can they even say this. They are moving people to other areas like table service? Don't worry that will fail then those people will be out of work - but it's totally not because of the kiosks.

Automated ordering via kiosk or smartphone app makes a lot is sense. It's almost as easy as turning the cash register around to face the customer!

Standard corporate operating procedure. Saying that you're replacing workers with automation doesn't play well, bad PR. And you certainly don't blame it (publicly) on minimum wage increases. No, you state the change in positive terms such as using technology to augment the customer experience. Adding not subtracting. Once kiosks are fully rolled out and the news cycle has moved on then quietly start slashing those table service jobs ("surveys found they were not valued" or whatever).

I think if you compared growth rates across countries to the tax per GDP of the country, you'd see pretty good correlation. [...] Rich countries can afford a lot of taxes if they generally let markets work.

This makes intuitive sense, but unfortunately is not correct. I just pulled the data from wikipedia, they have a list of countries by govt tax as share of GDP and one of growth rates. Some countries don't appear in both, eg DPRK has 1% growth, supposedly, but their taxes are unknown; and growth rates of small territories like US Virgin Islands are reported, though their tax as a share of their product is not reported. But these are usually just islands and things so won't change the overall picture much at all.

You can copy and paste and make a chart in excel, you'll see no trends whatsoever. For example, China and India we can say are comparable countries - high population, both in Asia, both industrialising - China takes 10% more of the GDP but ends up with the same growth rate as India. NZ takes more of GDP than Australia and has higher growth rate. Bahrain takes 4.8% and has 4% growth, while UAE takes 1.4% and has 2.7% growth. Bulgaria has 27.8 and 3.4, Russia has 19.8 and is in recession.

There are just so many other factors. You don't even see trends in looking at one country, since it's common for governments to cut taxes and raise spending during recessions, in an attempt to break out of the recession - which doesn't always work, since increasing government debt has other flow-on effects, but even when it does work, they find themselves unable to raise taxes and drop spending later.

Here we have 4 new workers starting their careers, made possible by rising wages for low skill workers:

People just like technological solutions, the cost hasn't much to do with it. Here in Melbourne, we've had a lot of ticketing systems over the years since we decided to get rid of tram and train conductors. The most recent is the Myki card system, basically a debit card which you can only pay for public transport tickets with. For some reason it cost $1.5 billion. At $50k each, this could have paid for 1,000 conductors (about twice as many as needed) for 30 years - and the system won't last 30 years, that's for sure.

A year ago they renewed the 7 year contract for another $700 million. So that's another 500 people for 30 years.

People just think that high tech is good, even if it's MORE expensive. Wages are irrelevant, really, machines will replace humans wherever possible cos machines are kew1, man. This is after all the principle of the Mac Tax. "Yes you should pay twice as much, because it's kew1!!!"

I think it's pointless to raise minimum wage for fast food workers. Most of those jobs are soon going to be automated, so they'll be dispensed with altogether.

I do wonder what will happen to the fast growing elderly population if nurse aides and home health aides aren't paid at least $15 an hour. It's going to get ugly. I used to work in nursing homes, and they beg for CNAs to work there, but won't pay them more than $10 an hour.

"Metro Trains Melbourne is also responsible for 218 railway stations and employs a workforce of 3,500 rail professionals including train drivers, mechanical and electrical engineers, network operations specialists and customer service representatives."

There are 218 stations. Most are staffed already; around 1985, Flinder Street Station had 3 guys at windows, 3 guys at the gates, and a guy who came out and changed the clocks to show the next train on each line, 7 people at peak times; now they have 1 guy at the window, 1 guy sitting behind a computer changing the times on the clocks, 2 groups of 4 ticket inspectors, 1 person on each of 8 platforms making announcements at peak times, and so on - they employ more people with Myki and other electronic systems than they did before that. But then, some suburban stations are unstaffed, and others are only staffed for part of the day.

Of course, some staff aren't counted in the wiki. Unstaffed stations made people feel insecure (crime rates, including crime on railways, have dropped, but people feel insecure), the government decided to put cops on the train lines. The cops didn't want to do it, so the government hired Protective Services Officers (formerly just court and state building security guys), with lower standards than VicPol. They have two per train station, plus admin staff etc, so that's 500 staff just there - they're part of the cost of the train network, but they don't count. $80 million a year cost there.

Any calculations of cost vs Myki must allow for not only the original $1,500 million cost, but the $700 million for the next 7 years, and so on.

Myki is a Melbourne-only system, and like all technological solutions was supposed to replace people. However, as they found when they first brought in fancy ticketing systems back in the 90s, those old conductors they fired, many of them had to be re-hired as ticket inspectors. A conductor notices you jump a turnstile, a ticketing machine doesn't. So they have ticket inspectors.

The ticket inspectors and "customer service representatives" go back to being conductors. We don't need even half as many PSOs if the stations are staffed. Allowing an extra 2 employees per station on average, plus 10-20% more to allow for sick and holiday leave, training and so on, gets us around 500 people.

So we'd only need 500 more public transport workers in Melbourne than we already have, and we could go back to having staff at every station from first train to last, and people on platforms, etc.

Now, we won't do that, of course. Because of sunk cost fallacies and no government can take police off the streets, the timid middle class won't stand for it. But the point is: technology here has not saved us money and made people unemployed, it's actually cost us a lot, lot more - and lead to a lot, lot more employment. Usually it's educated jobs, but not always - cf PSOs.

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I generally think that tech is not adopted until it is cost competitive. Well that's almost certainly the case in private industry where the bottom line drives decisions.

You're on a discussion forum which is founded on the premise that most people just piss away their money, and you are asserting that tech is adopted rationally?

Technology does not replace people or reduce costs. It changes jobs and often means more education is needed. Despite going from typewriters to photocopiers and personal computers, we have more people working in offices than ever before; but instead of just going to Secretarial College, they have to do a Bachelors in something. So the universities have to expand to accommodate more students. And those students graduate with a student loan debt, so they demand higher salaries. And the computers cost money, and take power, and require more of the airconditioning, and people have to set the computers up and maintain them with their frequent breakdowns.

So in the end, the office with computers costs a lot more to run than did the office with typewriters. The people edged out are those unable or unwilling to get an education. There are indeed losers in this game of social change - but it's not because of minimum wage, it's because we think technology is cool, man.

To those that say "the fight for $15" will result in less workers, it's not true.

Here we have 4 new workers starting their careers, made possible by rising wages for low skill workers:

Happy, hard working employees who never need a break, always show up on time, never take a day off, and never take to the streets demanding ridiculous wages.

Enjoy that $15/hour wage...

What country is this from? Silly Americans with their center of the universe syndrome. This could be from Canada, Germany, Australia, Japan, Korea or anywhere.

Well, it's probably not from Germany, Japan or Korea... since they don't tend to use English.

If we look at the machines we can see the Interac logo - this is a Canadian only thing. So my guess is it's from Canada.

That photo was old.

I recently traveled from Texas, to my home state (or the state I escaped, if you prefer), and saw a lot of these new "employees." Turns out the great state of NY, in it's continuing effort toward over taxation, over regulation, and economic failure, jacked up the minimum wage well above the Federal level.

That's great news for the companies that make robo-order takers.

The ones I experienced were much smaller than the ones in the photo.

Worked like a charm. The new employees never bitched. Never moaned. Never walked off the job. Never demanded a break from their high pressure job. And my order actually was done right.

FWIW, I've worked plenty of minimum wage jobs in my life. That's the reason I don't work for min wage now....

Worked like a charm. The new employees never bitched. Never moaned. Never walked off the job. Never demanded a break from their high pressure job. And my order actually was done right.

FWIW, I've worked plenty of minimum wage jobs in my life. That's the reason I don't work for min wage now....

This automated ordering system should have been done a long time ago. I always felt sad watching older adults take these jobs away from teenagers who needed them. Now these adults will have to learn a real skill to work.

If there's so much more productivity, why are more people employed in offices than ever? Farming is more productive, so it now employs less people. Manufacturing is more productive, so it now employs less people. Yet you say offices are more productive, and they employ more people? Really?

It's like, why did the war in Iraq cost more than the war in Vietnam, even though less troops were used and less bombs dropped? It just costs more to lose a war than it used to. Likewise, pushing paper around costs more than it used to.

If there's so much more productivity, why are more people employed in offices than ever? Farming is more productive, so it now employs less people. Manufacturing is more productive, so it now employs less people. Yet you say offices are more productive, and they employ more people? Really?

It's like, why did the war in Iraq cost more than the war in Vietnam, even though less troops were used and less bombs dropped? It just costs more to lose a war than it used to. Likewise, pushing paper around costs more than it used to.

A smaller percentage of folks' income is now spent on food, so they consume more of other goods/services/etc. People "consume" more things nowadays that are produced by people who work in offices (and have other people in offices supporting them). Electronics, apps, web sites, etc.

Speaking as someone currently being paid near minimum wage I'd be happy about an increase.

But whenever I think about it from a macro perspective it becomes clear raising the minimum wage is not a good solution as supply and demand will cause their to be less jobs making it a zero sum game at best. This also makes it harder for teenagers and newly graduates to get jobs as they need to do more to earn the higher income but without jobs they can't get experience. I'm already experiencing something similar in the accounting industry where I'm going to have to volunteer for awhile simply to get my foot into the door and get some experience.

In addition I think it's up to us and the government to support people who can't make enough to live rather than forcing companies to pay more.

As base level tasks become more and more monetized, putting more focus on welfare will become required, but before we reach that stage we will have to reexamine how we treat people on Welfare in our society, as currently we treat them rather poorly and on an emotional level I think less of them despite knowing on an intellectual level its often not their fault.

Sadly this view of welfare is for the week is something commonly shared, many poor people even share the belief and are proud that they haven't "sold out" to the government.

Speaking as someone currently being paid near minimum wage I'd be happy about an increase.

But whenever I think about it from a macro perspective it becomes clear raising the minimum wage is not a good solution as supply and demand will cause their to be less jobs making it a zero sum game at best.

Once again: the experience of Australia, with double the US minimum wage, shows that this is not the case. A higher minimum wage means higher costs for employers, but it also means more money for people to spend on things those businesses produce.

If higher wages are a zero-sum game, then everyone should be on minimum wage, since it won't make any difference, right? Why is a raise for the guy on $100,000 good for the economy, but a raise for the guy on $20,000 bad for it?

If higher wages are a zero-sum game, then everyone should be on minimum wage, since it won't make any difference, right? Why is a raise for the guy on $100,000 good for the economy, but a raise for the guy on $20,000 bad for it?

The argument is that a business is voluntarily giving the raise to the $100k employee, because it makes business sense to do so--either the employee brings that much value, or it provides an incentive to employees to be more productive, etc. For the $20k employee, the difference is that raising the minimum wage forces the business to spend money in a way that doesn't benefit the business. You're forcing a transfer of value without any reciprocal benefit.

I know I've touched on this before, but laissez faire free market economics frequently lead to terrible consequences for societies. If we let the "markets" decide what people should be paid, then we'd still have workers being paid company scrip so they could pay the rent on their company housing like what we had during the horrors of the Gilded Age.

I think my big issue with minimum wage is that for most people, minimum wage isn't the wage you make your entire life. Most people start there and work up. If you've spent the last 15 years working for minimum wage, it's you, not the system, I'm sorry.

I know I've touched on this before, but laissez faire free market economics frequently lead to terrible consequences for societies. If we let the "markets" decide what people should be paid, then we'd still have workers being paid company scrip so they could pay the rent on their company housing like what we had during the horrors of the Gilded Age.

Yes, letting markets operate freely sometimes has terrible consequences, but sometimes it also has good results. It's not any more reasonable to characterize anti-minimum wage arguments in this way than it is to claim that raising the minimum wage to $15/hour will leave us on the doorstep of Venezuelan catastrophe.

I know I've touched on this before, but laissez faire free market economics frequently lead to terrible consequences for societies. If we let the "markets" decide what people should be paid, then we'd still have workers being paid company scrip so they could pay the rent on their company housing like what we had during the horrors of the Gilded Age.

Certainly a totally free market has its problems. Monopolies are one such problem. Company scrip was one such problem in the past. At the same time, however, we live in an age of unprecedented availability of information, and practices like that are much harder to pull off. Witness, for example, all the flak Amazon got a few years back for its "churn and burn" approach to employees.

Certainly, labor laws have helped shape cultural expectations of worker conditions to the benefit of workers. But minimum wage laws are a bit different from, say, basic safety regulations, because they literally outlaw a certain type of job, and prevent people from taking those jobs even if they fully understand that their pay is low.

I know I've touched on this before, but laissez faire free market economics frequently lead to terrible consequences for societies. If we let the "markets" decide what people should be paid, then we'd still have workers being paid company scrip so they could pay the rent on their company housing like what we had during the horrors of the Gilded Age.

Certainly a totally free market has its problems. Monopolies are one such problem. Company scrip was one such problem in the past. At the same time, however, we live in an age of unprecedented availability of information, and practices like that are much harder to pull off. Witness, for example, all the flak Amazon got a few years back for its "churn and burn" approach to employees.

Certainly, labor laws have helped shape cultural expectations of worker conditions to the benefit of workers. But minimum wage laws are a bit different from, say, basic safety regulations, because they literally outlaw a certain type of job, and prevent people from taking those jobs even if they fully understand that their pay is low.

Low wages can really hold a society back because cheap labor availability makes technological advancement unnecessary. Some historians theorize that the Romans or Chinese would have went much farther technologically, but never had an incentive to due to the wide availability of slaves.

I know I've touched on this before, but laissez faire free market economics frequently lead to terrible consequences for societies. If we let the "markets" decide what people should be paid, then we'd still have workers being paid company scrip so they could pay the rent on their company housing like what we had during the horrors of the Gilded Age.

Certainly a totally free market has its problems. Monopolies are one such problem. Company scrip was one such problem in the past. At the same time, however, we live in an age of unprecedented availability of information, and practices like that are much harder to pull off. Witness, for example, all the flak Amazon got a few years back for its "churn and burn" approach to employees.

Certainly, labor laws have helped shape cultural expectations of worker conditions to the benefit of workers. But minimum wage laws are a bit different from, say, basic safety regulations, because they literally outlaw a certain type of job, and prevent people from taking those jobs even if they fully understand that their pay is low.

Low wages can really hold a society back because cheap labor availability makes technological advancement unnecessary. Some historians theorize that the Romans or Chinese would have went much farther technologically, but never had an incentive to due to the wide availability of slaves.

Can you share a book or something that makes that hypothesis? It sounds intriguing.

I know I've touched on this before, but laissez faire free market economics frequently lead to terrible consequences for societies. If we let the "markets" decide what people should be paid, then we'd still have workers being paid company scrip so they could pay the rent on their company housing like what we had during the horrors of the Gilded Age.

Certainly a totally free market has its problems. Monopolies are one such problem. Company scrip was one such problem in the past. At the same time, however, we live in an age of unprecedented availability of information, and practices like that are much harder to pull off. Witness, for example, all the flak Amazon got a few years back for its "churn and burn" approach to employees.

Certainly, labor laws have helped shape cultural expectations of worker conditions to the benefit of workers. But minimum wage laws are a bit different from, say, basic safety regulations, because they literally outlaw a certain type of job, and prevent people from taking those jobs even if they fully understand that their pay is low.

Low wages can really hold a society back because cheap labor availability makes technological advancement unnecessary. Some historians theorize that the Romans or Chinese would have went much farther technologically, but never had an incentive to due to the wide availability of slaves.

Certainly labor being more expensive provides more incentive to invest in mechanization (although I'm not sure how much, as mechanized processes are still usually going to cheaper than even slave labor (who still have to be fed and sheltered). But do you really want to argue that the government should ban the most vulnerable people in the labor pool from paid work because you think it might spur investment in mechanization/automation? I don't think I want the government making those kinds of decisions.

You see, I was thinking that low wages allowed for businesses to retain more earnings, which meant more funds would be available to invest for expansion, so you'd see faster growth.

That is actually the basis of capitalism, that profit is reinvested into the company to expand it. However, Western society is capitalist in the same way that Russia was communist. The warping may be an inevitable development of the system, but it is a warping nonetheless.